© . The Astora natural gas depot, the largest natural gas storage facility in Western Europe, is pictured in Rehden, Germany, March 16, 2022. REUTERS/Fabian Bimmer
PARIS () – The European Central Bank (ECB) should look beyond short-term fluctuations in energy prices and focus on underlying inflation trends, ECB policymaker Francois Villeroy de Galhau said on Tuesday. Villeroy, speaking at a sustainability conference hosted by The Economist magazine, said the ECB needed to normalize monetary policy to keep people’s inflation expectations anchored. “It is indeed time to take our foot off the accelerator, as decided at our last board meeting. That said, we should not overreact to short-term energy price volatility, and instead focus more on underlying inflation and in the medium term,” he said. Driven by rising energy prices, inflation in the eurozone reached a record 5.9% last month. Underlying inflation, which excludes volatile items like energy and food, is also rising. The crisis surrounding the Russian invasion of Ukraine has further clouded the inflation outlook by increasing pressure on energy and commodity prices. Villeroy, also governor of the French central bank, said the energy transition could positively and negatively affect inflation, but that the impact on energy costs will most likely lead to some inflationary pressures. However, climate transition policies were not responsible for the current spike in energy prices, he said, and increases in carbon prices on the European Union’s emissions trading system explained just 7% of France’s electricity price increase last year. Disclaimer: Fusion Media would like to remind you that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data. Fusion Media or anyone associated with Fusion Media accepts no liability for any loss or damage resulting from reliance on any information, including data, quotes, charts and buy/sell signals on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.